Gen Z Tech Workers Most Affected by AI Disruptions, Says Goldman Sachs
A new analysis from Goldman Sachs indicates that Gen Z tech workers are particularly susceptible to ongoing disruptions fueled by AI in the labor market.
According to senior economists at Goldman Sachs, the shift in the tech industry is significant, with Gen Z professionals facing some of the highest unemployment rates. Joseph Briggs, a senior economist at Goldman, noted how unemployment among high-tech Gen Z workers has surged at a pace that outstrips both broader tech sectors and younger workers in various fields.
In a recent episode of the Goldman Sachs Exchange Podcast, Briggs pointed out that the unemployment rate for tech workers aged 20-30 has climbed by approximately 3% since the beginning of the year. This increase stands out, especially in contrast to the overall unemployment within the tech sector and among younger individuals in general. “This is a much larger spike than we’ve observed before,” he mentioned, highlighting the unsettling situation.
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Even though AI adoption in workplaces remains somewhat modest, Goldman Sachs estimates that only about 9% of firms that use AI regularly have experienced a significant slowdown in their tech employment figures. Since the emergence of OpenAI’s ChatGPT, the industry has witnessed a disruption in what had been two decades of consistent employment growth. Major players like Microsoft, Google, and Meta are shifting their focus towards AI investments and have collectively reduced their workforce by nearly 30,000 employees, heightening competition for remaining positions.
This situation particularly impacts entry-level roles. Data reveals that entry-level tech positions in the U.S. have decreased by about 35% since January 2023, leaving many recent graduates and young professionals struggling to navigate the job market. An April report from the World Economic Forum indicated that nearly half of U.S. Gen Z job seekers feel that AI has diminished the value of their university degrees.
Breitbart News previously reported on the potential threats AI poses to entry-level employment. According to the Burning Glass Institute, a notable shift shows that unemployment among graduates has been rising quicker than among those with only high school diplomas or associate degrees. This trend seems to affect almost every field, from visual arts to engineering.
Employers are noticing this change, too. For instance, at Hirewell in Chicago, marketing clients are increasingly favoring AI solutions over the hiring of entry-level staff. Bill Balderaz, CEO of consulting firm Futurety, noted, “We’re looking forward to seeing you in the future,” reflecting this adjustment.
Briggs mentioned that while AI’s overall impact on young workers across sectors is limited, the tech industry is a noteworthy exception. “When we zoom into specific fields where AI is enhancing efficiency, we can see some concerning trends,” he said.
Nonetheless, AI isn’t the sole issue at play. The job market for younger workers is currently marked by what Briggs describes as a “low-employment, low-burning” environment. New graduates are facing a lag in employment, with the current rate climbing to around 5.5%. For all workers aged 22-27, the unemployment rate sits at about 6.9%.
